January in Crypto — A Bear’s Market

At the start of play on January 1st 2022, you could purchase 1 Bitcoin for $46,311. At the close of play on January 31st, that same Bitcoin would cost you $37,208. A fall that is reflective of the cryptocurrency market throughout January, investors in crypto have been hit by the market’s trademark volatility in the opening month of 2022 — however, some managed to navigate the storm.

A Bear’s Market

January proved to be a bear’s market. If you held a sense of skepticism about the direction of crypto markets coming into the new year and you wanted to cash in on this by selling short, fortune would have favored you with a significant return in most cases. That’s not to say there weren’t a good handful of tokens that managed to ride the rollercoaster of the month (more on those later), but generally, short selling was the most beneficial tactic.

Overall, the crypto market lost $1 Trillion in value throughout January, and while there are small chutes of recovery being seen across the industry, it is still indeed in recovery. Bitcoin itself lost nearly 50% of its value between November and January, showing just how significant the downturn has been over recent months and how it really bottomed out during the first month of 2022.

January 21st — The Turning Point

A quick glance at any crypto market summary on January 21st would demonstrate just how widespread the cryptocurrency value collapse was. In a list of the top 50 live crypto prices on that morning, only 5 were heading upwards — the rest, plummeting down, including likes of Bitcoin, Ethereum, and Shiba Inu.

Crypto wasn’t alone however. Stock markets across the globe also suffered some of their worst losses in over a year, with a ripple effect of decisions made by the Federal Reserve being felt across multiple industries. ADA, Ethereum, Chainlink and Litecoin fell in value by 18.1%, 19.35%, 15.73% and 13.4% respectively. Bitcoin started the day at $40,699, and ended it at $36,457. It was the start of a drop that would wipe tremendous value off the industry.

The Diamonds In The Rough

With all this being said, it wasn’t a rough month for everybody. Inkeeping with the typical market volatility that we have always been able to observe in crypto, tokens such as ETH Fan Token, Farmer Doge and Torekko made 4 figure gains throughout January. While Farmer Doge may sound like a bit of a parody, its 6,101% increase during the first month of 2022 was certainly to be taken seriously, and would have no doubt been a welcome break for some fortunate traders from the plunging of other assets on the market.

With over 6,000 crypto tokens available to traders wherever they are in the world, there is always an opportunity available to buck the industry trend. If the market is suffering on the whole, there will always be a few diamonds in the rough to take an opportunity on. January proved to demonstrate this once again, with 7 tokens gaining by 1,000%+ and dozens more gaining over 500%+.

Looking Ahead

Looking towards February, we are already starting to see some green chutes of recovery. The vast majority of the top 50 cryptocurrencies are trading positively over the past 7 days, and the market is looking more stable than in previous weeks. To that end, Ethereum is up almost 15% on last week, and Solana almost 17% — which is, while positive, double edged. A symbol of the crypto market coming out of a poor spell, it is also reflective of the trademark volatility previously mentioned.

While crypto markets have not been able to stave off significant dips during their existence, they have a history of not only bouncing back, but superseding any previous high positions that they held before. Time will tell whether the likes of Bitcoin and Ethereum are able to continue this trend, but one thing is for sure — if it is able to, it will be possibly its greatest comeback yet.

https://www.ft.com/content/7a37d891-db34-43a6-9ec9-ac9e0a5a1477

https://www.fxempire.com/news/article/the-crypto-daily-movers-and-shakers-january-22nd-2021-695641

https://coinmarketcap.com/

https://www.statista.com/statistics/863917/number-crypto-coins-tokens/#:~:text=In%20short%2C%20there%20are%20nearly,of%20digital%20coins%20in%202013.

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